washington dc

Employee Benefits for D.C. Businesses: Understanding Your Options

Posted August 3, 2017 by Kristin Hoppe in Benefits and Perks
D.C. Health Link isn’t the only legal option for D.C. small businesses that want to provide employees with access to high-quality health insurance.

As an employer, offering access to employee health insurance can be incredibly confusing. And with state and local laws, it gets even more complicated.

For example, if you’re a small business in Washington, D.C., maybe you’ve heard heard that D.C. Healthlink is the only option for employee benefits. We’re here to bust that myth. Here are the legal options you have to provide your employees access to health insurance.

Employee Benefits Options in D.C.

MYTH: Small businesses in Washington, D.C. can only obtain access to health insurance for employees through D.C. Healthlink.

FACT: Employers in D.C. have more than one legal option, including PEOs, depending on company size.

If your company has less than 50 full-time equivalent (FTE) employees in D.C....

You have two options to give your employees access to health insurance:

  1. D.C. Healthlink
  2. A PEO

Wait...what is a PEO? A PEO, or Professional Employer Organization, aggregates small- to medium-sized businesses under one Employer Identification Number (EIN). This gives a PEO collective bargaining power, so employees can access the same quality group insurance as employees at enterprise businesses.

In D.C., small group policies are only available through D.C. Health Link. Typically, a small employer can only buy a small group policy when the small employer purchases such a policy on its own.

But when a small employer offers employees access to benefits with a PEO, the small employer is plugging into the PEO’s large group policy. That means D.C. small group policy rules, including the requirement to purchase small group policies through D.C. Health Link, don’t apply.

In short, PEOs are a legal and competitive option for D.C. employers who want employees to have more access to choices other than just D.C. Healthlink for their team’s health insurance.

Get a simple guide to walk you through the process of creating a benefits package to fit your business.

Download Now

If your company has more than 50 FTE employees in D.C....

You have two options to give your employees access to health insurance:

  1. A broker
  2. A PEO

Businesses in D.C. with more than 50 FTEs have different options because they don’t fall under the jurisdiction of small group policy laws. This means that your company can look at competitive rates alongside broker’s rates and find the best fit for your company and employees’ needs.

Considerations When Choosing a Benefits Provider

A lot of considerations go into choosing the right employee benefits for your team. Picking the right provider is critical. Here are some questions you should ask yourself during the process:

  • What does a benefits package look like? - Employee benefits range widely, from medical, dental, and vision insurance to health savings accounts (HSAs) and commuter benefits.
  • Which benefits do employees expect the most? - Employees aren’t only looking for employer-sponsored health insurance. They’re also interested in paid sick days, 401(k) plans, and performance bonuses.
  • How do I navigate the legalities of offering benefits? - Learn about the employer mandate and the Affordable Care Act, as well as other required benefits such as unemployment insurance and workers’ compensation.
  • What other factors should I consider? - Dive deeper on how much different benefits offerings will cost you and your employees, including what services your benefits package will cover.
  • We Love PEOs

    Justworks is a Certified PEO. We believe the PEO model is better for entrepreneurs who are serious about taking care of their teams. PEOs give small and medium-sized businesses access to high quality employee health insurance at affordable rates, administer payroll and help with taxes. You can learn more about the benefits of a PEO here.

    This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.